JIM LEHRER: And, finally tonight, another conversation with a Democratic presidential candidate about health care-- Margaret Warner has tonight's.
MARGARET WARNER: Senator John Kerry of Massachusetts has joined the Democratic debate other health care, with proposals to expand access to health insurance and reduce costs. Under Kerry's plan to cover the uninsured, the federal government assumes all the costs of insuring poor children if states expand their coverage for working-poor adults. The federal government pays most catastrophic health coverage costs for companies that do offer insurance, and some private sector workers may buy enter the federal employees health-benefit program. He says these steps would create coverage for 27 million of the 41 million Americans currently uninsured. To finance the plan's $72 billion a year cost, Kerry proposes rolling back President Bush's tax cuts for wealthier Americans. He has also proposed a number of measures to contain health-care costs overall. Senator Kerry, welcome.
SEN. JOHN KERRY: Thank you very much.
MARGARET WARNER: First, just a general question. You and a number of your rivals have these plans, as we've been reporting, and they range in costs from less expensive than yours-- you and Governor Dean are at $900 billion over ten years. Dick Gephardt said $2 trillion. Do you see that much of an appetite out there among voters for this kind of a fairly massive plan to cover the uninsured?
SEN. JOHN KERRY: Well, it's not just the uninsured, and that's what's important about my plan. My plan is the first plan ever offered that actually reduces health-care costs for all Americans. You have 163 million Americans who get their health care today through the workplace. And their premiums are going up, they're skyrocketing, double digits every year for both the business and the employee. So what I do is, I create this relief of the burden where the federal government will pay 75 percent of the cost of the most expensive cases. That automatically reduces premiums for every American. I think, Margaret, if the choice to Americans is we can make sense out of our health-care system, we can bring all of the uninsured in over time, and we can lower the cost for every American, or have a tax cut for the wealthiest Americans. That's the choice. I think Americans will choose the health care.
MARGARET WARNER: Well, let's talk about this plan, this part of your plan to pick up the catastrophic cost. Now, Dick Gephardt would go much further than that, which is, he would help all employers with big tax credits for all of their coverage costs. Why not go that far?
SEN. JOHN KERRY: It's too expensive, we can't afford it, it's a nonstarter in Congress, nonstarter financially, and moreover, nothing is required of the employers themselves. I mean, you could have the health-care rates just go up. All of that money given to the companies will be gobbled up by an increase in rates. It does nothing to reduce costs. My plan, on the other hand, brings in almost the same exact number of people covered, but at the same time, we have a broader approach to the health-care system. You know, the approach to health care can't just be a band-aid here, band-aid there, it has to be comprehensive. I also go after the problem of drug transparency in the pharmacy benefit managers, where you have extended patents, you have rebates, kickbacks, all kinds of problems where the consumers pay a higher price than necessary. I go after the problem of medical error, where we lose 44,000 to 98,000 people a year because of medical errors-- the eighth largest cause of death in America, more people than AIDS. We have to begin to put technology into the system to improve our administering practices. I also do that. About 25 percent of the cost of health care in America is administrative overhead. No business in America runs like that. If we were to reduce the administrative burden with increased technology, if we have improved the medication for seniors and the tracking of medication, we can reduce the medical error for the hospitalization of seniors; that's $79 billion a year.
MARGARET WARNER: Let me just interrupt you, and ask you about that, though.
SEN. JOHN KERRY: Sure.
MARGARET WARNER: People have been talking about streamlining the administrative costs and paperwork since Ronald Reagan, or earlier. How would you actually force the private insurers and the providers to adopt a streamlined paperwork system, a streamlined reporting system?
SEN. JOHN KERRY: It's to their benefit. The beauty of what I'm offering is not a government plan. It's not a mandate plan. It's not a Washington solution. It's a market-based solution. And what it does is make greater competition in the health-care system itself because I also allow small businesses and individuals to buy into the same health-care plan that the president and senators in Congress give themselves. The minute you offer availability to that, you have more competition in the marketplace, and the companies will respond to that competition. It's... hospitals are desperately looking for ways to reduce their costs, because they need to be able to deliver quality care. I have an incentive bonus for quality, I have an incentive for technology. Let me give you an example, Margaret. In diabetes alone, we spend about $100 billion a year on diabetes. The experts tell us that we could reduce the cost of diabetes by about 50 percent with early diagnosis, with early intervention, reduce the dialysis costs, reduce amputation costs, reduce hospitalization. But all of that depends on a comprehensive approach to health-care system.
MARGARET WARNER: All right, let me go back to a couple of the items, though, that really cost money in your plan. But we'll talk about buying into the federal employees benefit program first. Everyone knows, or thinks they know, that this is a fabulous program. Once you open it up to nonfederal workers and even workers from any of your plans who actually work for companies, not just uninsured... not just the unemployed, excuse me, how do you keep that from becoming in fact the program of first choice, of first resort for companies and people?
SEN. JOHN KERRY: Well, first of all, we have a separate risk pool from the current risk pool, so we create a new risk pool. But secondly, it may become the place of choice. It's a business. I mean, I have a blue cross/blue shield plan. I'm offered as our other federal employees a whole bunch of big menus, and I get to choose from them. That's competition. We happen to have a fairly generous payment by the federal government, in addition. We have to provide the same kind of access to the same kind of benefits. And what will happen is, other companies are going to say, "uh- oh, we better be competitive with that plan," and you begin to force the system to have an accountability it doesn't have today.
MARGARET WARNER: All right. And another thing that costs quite a bit of money, a lot of money in your plan, some $500 billion over ten years, is this idea of having the federal government take over the cost of insuring poor kids through Medicaid, and so on. In laymen's terms, explain why would you catch... why are all these people falling through the cracks now, and why would having the feds take it over solve that?
SEN. JOHN KERRY: They're falling through the cracks because it's work to go out and find them, to enroll them, to make sure they're covered. A lot of them don't know about the plan, and they just fall through the cracks. And states don't like it because it's a burden to them. What I'm going to do is guarantee that we will do it at the federal level, the states will welcome the relief from that burden, and all they have to do is make up the difference between the Medicaid level and 300 percent of poverty. It's a net plus to the states of about $5 billion. But now, you mentioned a moment ago that this all costs so much money. It really doesn't cost that much measured against the other choices that we're making. I mean, if you look at $75 billion a year, the president has just passed a tax cut, 54 percent of which went to 1 percent of Americans, which was about $352 billion. I mean, what is the choice in America? Do you want to have a health- care system that makes sense, where we reduce the long-term costs to health care by dealing up front with diseases with early detection, dealing with nutrition, obesity, diabetes, arthritis, other problems? Or do we want to have the whole system implode on itself because America has become a place that only cares about a tax cut?
MARGARET WARNER: Okay, but you're...
SEN. JOHN KERRY: That's the choice of this race.
MARGARET WARNER: ...But your plan totaled, as scored by an independent authority, $900 billion over ten years.
SEN. JOHN KERRY: Yes.
MARGARET WARNER: Now the president's tax cut, at least on paper, the two of them add up to $1.6 (billion). Surely, you'll have to roll back the tax cuts for more than just the wealthiest...
SEN. JOHN KERRY: For the wealthiest.
MARGARET WARNER: But only the wealthy?
SEN. JOHN KERRY: Yes, it works for the wealthy and the inheritance tax. Those are the two areas where it's inexcusable for us to cut. I don't want to roll back the marriage penalty, I don't wrap to roll back the child-care credit, I don't want to punish people who got a $300 break at the 10 percent and 15 percent, so I don't take that back. But I think at the upper-income level, if Warren Buffet can tell America that he just got a bonanza of a billion dollars where he gets $365 million free, and he thinks it's more important to give $1,000 to every family, I think that's pretty good thinking. And I think that's the choice we ought to give America.
MARGARET WARNER: Senator John Kerry, thank you.
SEN. JOHN KERRY: Thank you.